swombat.com

daily articles for founders

Swombat.com is no longer actively maintained, but all the posts here are still available for your use. The original objective was to regularly summarise and comment on the best articles for founders each day, as well as occasionally post our my own thoughts and advice, so that you could read the most useful articles while focusing on building your own startup. As most of the articles in the founders library were selected to be "evergreens", I hope you still find them useful!

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More simply, the better the team, the lower the risk, and the higher the expected outcome, the more you're going to be willing to give a team and the longer you'll let them go until their next fundraising.

(...) Usually, teams are asking for enough money, plus a cushion, to get to some milestone roughly 12-18 months out.

So, ask for more and you're get a higher price IF the investors think you can handle it and you need it.

Generally, each round is going to set you back between 15-30%.

The way that rounds always end up diluting by 15-30% seems mystifying to industry outsiders. How much will I get diluted if I raise $500k? 15-30%. What if I raise $1m? 15-30%! $10m? 15-30%!

This reflects a deep pragmatism of entrepreneurship and venture/angel investment, based on the fact that no one has any god damn idea what a startup is worth anyway, so the figure is instead chosen based on a balance of:

Not diluting the entrepreneur so much that they become demotivated

Leaving room for further funding rounds without demoralising the founders

Providing enough cash so that, if the founder was roughly in the right ballpark, they will get 12-18 to execute on their vision before needing to raise another round or become cash-flow positive.